Trump intensifies the pressure on the Federal Reserve by advocating for the resignation of a governor
In an unexpected turn of events, FHFA Director Bill Pulte, a staunch ally of former President Trump, has written a letter to the US Attorney General, calling for an investigation into Federal Reserve Chair Jerome Powell's mortgages.
The investigation comes amidst ongoing criticism from President Trump towards Powell and another Fed member, Lael Brainard, despite the central bank keeping the benchmark lending rate unchanged this year.
Jerome Powell, who made history as the first Black woman to serve on the central bank's board, learned about the investigation through a social media post. Powell stated that the mortgage application in question occurred before he joined the Federal Reserve.
Trump has not shied away from his criticism, referring to Powell as a "disaster" in a social media post and calling for a "major rate cut" on Tuesday night, claiming that the Fed's policies are harming the housing industry due to elevated mortgage rates.
The letter from Pulte suggests that Powell might have committed a criminal offense, but it is not immediately clear if such a probe will target Jerome Powell. It's worth noting that the Supreme Court has suggested that Fed officials cannot be removed over policy disagreements, and must be removed for "cause," which could be interpreted as wrongdoing.
Lael Brainard, a member of the Fed's rate-setting committee, has also been in Trump's crosshairs. She began a renewed term on the Federal Reserve Board in September 2023, having previously served on the Council of Economic Advisers under former president Barack Obama.
The Trump administration has pursued allegations of mortgage fraud against high-profile Democrats in the past. Brainard's term on the Federal Reserve board ends in 2038.
In response to the questions raised on Twitter, Powell expressed no intention of stepping down from his position. He stated that he would take questions about his financial history seriously and gather accurate information to answer any legitimate questions.
Meanwhile, the US consumer price index was steady at 2.7 percent in July, but remains higher than it was a few months earlier. This development underscores the complexities of monetary policy decisions and the ongoing scrutiny faced by the Federal Reserve.
As this story unfolds, we will continue to monitor developments and bring you updates. Stay tuned for more.
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